There's a potential financial crisis looming for the city of Raytown, and it all revolves around a decision to build a Wal-Mart there.
In 2008, city leaders borrowed nearly $40 million in bonds to develop property for Wal-Mart and for several other stores which, to date, have not come.
The idea for this tax increment financing, or TIF district, was to use the tax money from Wal-Mart and the other stores to pay that bond debt.
Former Raytown Alderman Joe Creamer and all of his colleagues but one voted for the plan.
Creamer acknowledges the plan hasn't worked out the way it was intended in part because the deal was struck right before the recession.
As part of the property deal, city leaders paid the Raytown School District about $19 million to relocate a school from there. That deal was more than twice the cost of the roughly $7 million for Wal-Mart.
"When we negotiated with the school district, they were pretty strong in our negotiation with us," Creamer said.
"When 50 percent of the total money goes to an entity that doesn't provide taxes, the math doesn't add up," said Raytown Fire District Chief Matt Mace.
The Wal-Mart TIF deal caught Mace's attention when he says the city started asking for tax money the fire district didn't agree to pay. He says after months of trying to get city leaders' attention, the district threatened to sue the city.
"Our business is up," Mace said. "We're running 4,000 calls a year and don't have the money to spare."
After the lawsuit threat, Mace held two meetings with two different groups of aldermen to educate them about the Wal-Mart TIF and his concerns.
Raytown Times newspaper publisher Randy Battagler filed a complaint with Missouri's attorney general claiming those meetings violated the state's Sunshine Law.
"What two of the aldermen told me was they didn't want this coming out in the newspaper or on TV," Battagler said.
Mace insists he didn't violate the law. He also says with the largest debt payments pending on the $40 million Wal-Mart TIF bonds, barring any major new tenants moving into the TIF district, either the city will have significant service cuts or default on the loan.
Additionally, Mace points out the city failed to make its annual reports on the Wal-Mart TIF to the state of Missouri for four straight years and also failed to conduct required public hearings.
"It's a debacle," Mace said.
Creamer acknowledges the TIF deal was set up so the city would make larger payments on the bond debt on the back end of the up to 23-year repayment schedule.
An annual Raytown audit done for the city in 2015 revealed at that time about $50 million was still owed in interest and principal for the $40 million loan.
"We did not anticipate as a board that we would see that type of situation down the road," said Creamer.
Raytown Mayor Mike McDonough declined comment on the status of the Wal-Mart TIF, stating negotiations are ongoing with the fire district. However, he did say the city is still actively seeking more stores for the Wal-Mart TIF district to help pay off the loan.
Through a letter from their attorney, city leaders also responded to Battagler's claim of a Sunshine Law violation. They claim the law was not broken because no decisions were made about public policy.
The letter says the meetings were strictly educational.
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Andy Alcock can be reached at anderson.alcock@kshb.com.
